Then Lehman Brothers declared
bankruptcy on September 15, 2008.
This began the total meltdown of the
financial markets with many of the
world stock exchanges experiencing
their worst losses in history on October
24, 2008. I had been through four
industry downturns before; including
9/11. I was convinced Cycles sales
would benefit from trading down, and
I was worried about our more expensive
Hahn wines.

But this “downturn” was decidedly
different. Everyone was affected. I
don’t care how rich you were. A psychic
shift occurred. Cycles sales stalled
out, then started to decline. The way
I described what happened to my
owners of Hahn Family Wines is best
depicted in the following scenarios,
and most importantly in the values
these images project:

Pre-September 2008 – “The
Roaring Twenties”– Conspicuous
consumption is the norm. There is
money to be made; easy money.
Bernie Madoff is a hero, everybody
wants to be like him, contributing to
philanthropies.

The sky is the limit: “Let’s party
like it’s 1999.” In fact, it was 1999
when the party started to really take
off, with deregulation of the banks,
etc. Consumers expected at least a
14% to 15% return on stock investments;
many of my friends expected
more like a 20% to 25% return or they
were not happy.

wants
to be like him. A 4% to 6% return
on your investment feels very good.
Just not bleeding money anymore
feels good.

I believe this psychic shift has had a
profound effect on all consumers, and
therefore on the way we now need to
market our wines.

I ask the question: Who has the
money to buy my wine? I heard an
intriguing report on National Public
Radio and researched it. We are now
ten years into the largest generational
transfer of wealth in U.S. history.
Between roughly 2000 and the
year 2050 a minimum of $41 trillion
will pass from one generation to the
next. (I am thinking my Millennial
children are never going to see any
of my share of that — I am going to
the Bahamas.) Even after the financial
meltdown, economists still came
up with between $40.4 trillion and
$65.3 trillion.

Unemployment remains high
and is going to remain high for
some time, but it is not divided up
equally. In fact, as stated in Rob
McMillan’s Silicon Valley Bank 2010
State of the Industry Report, “The latest
data show 16% unemployment
for Millennials, 9% for Gen-Xer’s
and only 7% for Boomers.”

Another report, from the Luminosity
Marketing Study of “Boomerangers”
(ages 20 to 29, many of whom moved
back home) estimates Millennial
unemployment at 37%. Who has the
money now to buy my wine?

By coincidence my family seems
to represent the perfect snapshot of
American life. This fortuitous happenstance
has been a major benefit
to me throughout my career. My
mother is 87 – part of the “Greatest
Generation.” I am a “Boomer.” My
daughter is 34 (Gen-X); my oldest
son, 28 (leading edge of Millennials);
my youngest son, 16 (the latter part
of the Millennials).

My daughter is a CPA hired directly
out of college by Arthur Andersen
Company in October 1999, wanting
security. She was wooed directly
out of college by several companies.
Companies were touting in-office
massages on Fridays, child care,
and unbelievable, countless bennies.
Arthur Andersen won. But so much for the

security of a large company —
she was one of the last ones to turn
out the lights in the San Francisco
office in 2002.

My oldest son recently graduated
from UC Davis with a degree in
Viticulture and Enology. This is his
second degree; he received a Bachelor
of Science at UC Santa Barbara. After
graduation, it took him one year to
find a job. No one wooed him. No
massages. Many of his friends are still
unemployed or employed part-time —
“under-employed” is the term. They
are just thankful to get a job. If they
can make 6% return on investment in
their retirement accounts – hallelujah!

My youngest son has no clue what
is going on. He got me to buy
him a new $500 bicycle. His general
state of oblivion really got me
thinking. Depending on how you
determine it, the last Millennial to
turn legal drinking age will do so in
the year 2021. Today about half the
Millennials can’t drink, at least not
legally, and the older half is suffering
massive unemployment.

It is true that the Millennials did
not have any retirement savings to
lose like the Boomers; but that also
means they do not have any retirement
savings to recover. I have gained
back most of my retirement savings,
though it seems to come and go these
days pretty quickly.

I used to believe that we were
undergoing an overarching 10-year
shift; To quote Silicon Valley Bank
again, “They [the Millennials] are
unlikely to matter as much as the
Boomers and gen-Ex-ers when purchasing
luxury wines … probably for
the next decade.” I now believe we
are more likely in a 30+-year shift.

My youngest has no clue about
recessions, mortgages, etc. He is
largely unaffected. In 10 years, he’ll
be 26 years old; in 20 years, he’ll
be 36 years old. It is going to take
20 years before that segment of the
population that was not traumatized
by the meltdown gets to the
prime demographic for wine consumers,
30 years before they are at
peak earning potential.